Like many Americans struggling to free yourself from the burden of debt can be a mountainous battle. It may seem like you take one step forward only to take two steps backwards. This is how I felt when embarking on the journey myself. Don’t despair; hope is not lost because there are a few simple ways you can get out of debt. These have worked for our family and I am sure they can work for yours. Financial Guru Dave Ramsey is spot on with his advice on financial security.
First, it is important to cut down on expenses. You may need to weed through and cut out some luxuries for a time while your debt is brought down. Decide if there are cheaper ways to get Internet access or if the extra channels on cable are really necessary. There are also companies that give you a discount for providing you with all three services such as phone, Internet and cable. Choosing an Internet phone line such as Vonage can save you over $100 on just your phone bill alone. Some may choose to completely forgo a home phone and instead rely on their cell phone. This would eliminate that expense completely. Research all of your extras to see where you can cut. You may also want to reduce your spending on groceries by using a method of having only one trip a month to the grocery store. You can freeze so many of your groceries and even certain fresh fruits and vegetables on sale. It makes a big difference in your spending if you go into the grocery store less because impulse buying seems to be what takes us over budget.
Second, you should pay down your smallest balance credit cards or bills first. This is against popular belief of paying down the highest interest rate first however; you will reap the benefit by feeling the burden lift each time a debt is paid. This is a rewarding feeling and will likely keep you on the right track the more you are able to experience it. So take care of the small bills then work your way to the large ones.
Third, work out payment arrangements for debts that are ready for collection. For bills that are severely past due and will jeopardize your credit, you will want talk to them about a plan to pay back the debt over time. This will help even out your monthly amount due each month. In most cases companies are willing to take $20-$30 per month on each bill in order to receive their payments. This will help you in the long term to avoid any derogatory marks on your credit.
By following these simple steps, you will be on the right track. Before you know it, you will be debt free.